No tax increases next year?

[Guest Lester Weevils]

A fair tax would reward people when they start adjusting the way they spend money. I think

a lot of people would immediately realize how much money they waste and would become more

frugal. That would lend to the idea of more people creating wealth for themselves, which is what

OS is referring to by rewarding success, instead of punishing it with the system we have now.

It would also limit the government's control over our lives by making government live within its

means.

I don't have a problem with rich folks and I don't see how only three people would end up with

everything, Lester. There are millions of small investors. You have to start somewhere. They did.

Welfare is slavery and a sin. It needs to be completely eradicated, both individual and corporate.

Charity is an investment in kindness and needs to be encouraged and replicated. Charity is not

welfare. Safety nets, like welfare and government health care only cost other people and have

huge bureaucratic overhead and should be abolished. T

I like the Fair Tax. No need for billions of wasted dollars trying to figure out how to minimize your

tax burden each year, and no need for the IRS audit. Overnight, there would be a reduction in

government spending, just in one department alone. Productivity would go straight up, unless you

are a former government employee looking for gainful employment, or maybe work for H&R Block.

Hi 6.8

I like a fair tax concept too, or alternately a flat income tax. But there would have to be NO exclusions for ANYTHING for it to be remotely fair. Except a standard poverty-level income exemption which applies to everyone, which is generally part of all the plans to keep the tax from being excessively regressive.

For many years I believed in the "starve the beast" reasoning-- If you reduce taxes, then eventually the government will be forced to reduce its spending. Many people believed in that theory and was a justification for lowering taxes even if it 'temporarily' hurts the deficit. And of course the Laffer curve demonstrates that there is a certain optimum level of taxation which generates the greatest total tax receipts.

However, I and many others were too naive with the "starve the beast" theory. We didn't realize that congress is full of sick spend-a-holics addicted worse than a crack head or compulsive gambler. Especially the last two years have demonstrated that if you cut their income, they will borrow to make up the difference. When it gets to the point that nobody will loan them money, they will just print what they need. But they WILL NOT quit spending.

It is a nice pipe dream to say we can replace those fools with fiscally conservative politicians. Maybe some day that will happen, but history proves that we will probably always have spendthrifts in washington, or they would have all been run off a centruy ago.

There will always be some level of spending, requiring some level of tax revenue. That is where one's idealism would be tested against practicality and self-interest-- If you change the tax code so that wealthy people pay less tax, and there is just no practical way to attenuate the spending, then more money will have to be collected from the poor and middles to make up the slack. Do you want to change the tax code so that Bill Gates pays less and you pay more? Regardless of how idealistically fair it may be, it doesn't sound especially appealing from a bread'n'butter standpoint.

That is why a flat income tax or flat sales tax (transaction tax) would only be fair if there are NO EXEMPTIONS FOR ANYTHING.

One social engineering aspect of a progressive tax has always been "oligarchy prevention". Regardless of how pure a democracy or republic ought to be, the fat cats will have more power than the working stiff.

Take a 30 percent flat tax or fair tax that exempts investments--

A middle-class guy makes $100,000, invests $10,000, and pays 0.3 * $90,000 = $27,000 tax. He gets "free and clear" investment income maybe 5% per year on his $10,000 invested = $500 per year tax free.

A fat cat makes $10 million, spends $1 million on a remarkably lavish lifestyle, and invests $9 million tax free. He pays $300,000 tax and gets tax free investment income maybe 5% per year on the $9 million invested = $450,000 per year tax free. Since the fat cat doesn't really need that profit to buy more mansions or yachts, he can just plow most of that tax free income back into more tax free investments. The miracle of compound interest.

Every year, the fat cat will increase in wealth at a dramatically faster rate than the middle-class guy.

Regardless how nice a fellow that fat cat might be if he just happened to be some guy living next door, when he gets richer and more powerful he will get increasingly powerful to indulge his foolish ideas in controlling my life. Think Haslam, Corker or Soros. They would all be fine fellers if they didn't have enough money to feed their megalomania and screw with our lives.

So no I'm not jealous of the rich and do not think they should be punished. But I don't like anybody being able to ride their hobby horses over my little life, and a tax structure that gives them more power would be a bad thing.

Edited December 17, 2010 by Lester Weevils

[xRUSTYx]

In MY Humble Opinion .... I believe income tax (both state & federal) should be dropped. In its place, implement a CONSUMPTION tax ....

Why punish people who want to save (thus in essence, making our banking system and structure stronger) Tax those that like to spend $$$. Healthy Banks = Healthy Economy for the most part.

Do away with Income tax, and raise sales tax on everything (minus food, scrips, etc....) to 20-25% .... IRS and Many different tax agencies would no longer be needed, and tax could be governed at state level.

[Guest Lester Weevils]

Hy xRUSTYx

As long as you charge 20-25% on CONSUMPTION of folks buying stocks, bonds, and real estate too, I'm all for it. I won't mind paying sales tax on my investments.

If you introduce a consumption tax that exempts investments, Bill Gates and George Soros will thank you. They will become increasingly powerful to mess with your life and buy politicians with all that extra money that you are paying in their stead.